Balu Forge Industries Ltd: 5 Reasons Why It Makes Sense

The Rationale

1. Naya Energy Works – Future Division

This is a 100% owned subsidiary of Balu Forge Industries Ltd (Current Mcap 2500 Cr). Naya Energy is engaged in the manufacturing of products for the New Energy Sector

Annual Report 2021
Annual Report 2022
Annual Report 2023

What is a Fuel-Agnostic System?

Many more developments are happening in this space. Just search the keyword with “New Energy ” in Annual reports 2021, 2022, and 2023

Naya Energy Division Plans

2. Raising funds through multiple Preferential Issues

Raising funds by issuing shares at ₹115.45/-

  1. Non-Promoter Group: ₹158.47 Cr
  2. Promoter Group: ₹34.63 Cr

Raising funds by issuing shares at ₹ 183.6/- 

  1. Non-Promoter Group: ₹45 Cr
  2. Promoter Group: ₹92 Cr
Total aggregated funds: 193.1 Cr

Some interesting names from the Non-Promoter Group:

In total, they plan to raise ₹330.1 Cr
Objectives of the fundraise

3. Capacity Expansion

Existing Machining capacity to produce 18,000 tonnes of Forged Components per annum. They are increasing it to 32,000 Tonnes per annum

Forging Capacities ComparisionsBalu Forge Industries LtdRamkrishna Forgings LtdBharat Forge Ltd
Capacity (in Tonnes per annum)18,000 + 14,000 (Capacity to be added)56,1007,50,126

NOTE: Bharat Forge Ltd is India’s largest forging company, followed by Ramkrishna Forgings Ltd.

4. End User Industries going through Massive Tailwinds

Industries such as Railways, Defence, Locomotive, and Marine are going through massive tailwinds

5. Unusual price movements:

Multiple Shakeouts in a Long Consolidation Phase

Disc: We are invested and holding from lower levels around 850-900 Cr Mcap.

See you next time.

Until then… Stay Prudent!

Disclaimer: This article is provided for informational purposes only and should not be considered as an investment advice

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